If the Economy Is in the Vertical Portion of the AS Curve,what

question 78

Multiple Choice

If the economy is in the vertical portion of the AS curve,what will be the effect on an increase in the price level on the level of employment?

• A)There will be substantial increase in employment
• B)There will be a less than proportional increase in employment
• C)There will be no change in employment
• D)Cannot be predicted from the information given

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Definitions:

Equilibrium Price

The cost at which the supply and demand for goods are exactly balanced in the market.

Fine

A sum of money required to be paid as a penalty for breaking the law or rules.

Supply Curve

A graphical representation showing the relationship between the price of a good and the quantity of the good that suppliers are willing to offer for sale.

Variable Costs

Expenses that vary directly with the level of production or output, such as raw materials and labor costs.